Introducing EconLog Price Theory: Cutsinger’s Solution

[Editor’s Note: Dear readers, you delighted us with all your responses to Professor Cutsinger’s inaugural EconLog Price Theory Problem. Thanks! We reprint that question below, followed by his suggested solution. Next week, we’ll post problem #2. Long live price theory!]

Question:

In his book, Basic Economics, Thomas Sowell (2015) writes, “the price which one producer is willing to pay for any given ingredient becomes the price that other producers are forced to pay for that same ingredient” (p.